Brief - Introducting Agro Processing
Brief - Introducting Agro Processing
Brief - Introducting Agro Processing
Why agro-processing?
Directorate: Agro-processing Support
Source: Statistics SA
What is agro-processing?
agriculture,
forestry & fisheries
Department:
Agriculture, Forestry and Fisheries
REPUBLIC OF SOUTH AFRICA
The average contribution of agro-processing to the output and value added of the manufacturing sector was
29,3% and 29,1%, respectively, during 2006-2010. Its
contribution to domestic fixed investment and export
was 28,5% and 13,6%, respectively, during the same
period.
Source: Statistics SA
Source: Statistics SA
Trade balance
Examination of the trade balance of the agro-processing industry shows that South Africa has become a net
importer for processed food (since 2004), textiles (since
1993), furniture (since 2008), footwear (since 1992)
and rubber (during the period reviewed, 1970-2010). A
net export position is observed for the beverages and
tobacco (since 1992) divisions and the trade position
has been almost neutral for the paper (since 2009) and
wood divisions (since 2007).
Skill composition
The skill level of employees in all divisions of the agroprocessing industry is largely dominated by semi-skilled
and unskilled labour. In most of the divisions, except
rubber (10,5%) and tobacco (16%), skilled employees
constitute less than 10% of the employees. Mid-level skill
was higher in the food (40%), wood (30%), paper (31%)
and tobacco (34,7%) divisions during 2006-2010.
Informal employment, on the other hand, is becoming
pervasive in the beverages (40,9%), textile (32%) and
wearing apparel (39%) divisions. Therefore, the share
of semi-skilled and unskilled labour in these divisions
has declined sharply. In general, however, there is a
declining trend in the share of unskilled employees in
most divisions, though marginally.
SME enterprises
Next steps:
Market concentration
The market concentration ratio for the agro-processing industry indicates that it is highly concentrated. In
most divisions, except wearing apparel and footwear,
the largest five enterprises contributed more than 50%
(Stats SA, 2008). However, the concentration varies
widely among subsectors: 80% for beverages (alcoholic
and non-alcoholic), 63% for paper, 77% for manufacturing of carpets, rigs and mats, 70-72% for animal feeds,
dairy and grain mill, 55% for wood and 51-56% for textiles.
Though large enterprises in the agro-processing industry contributed a significant share of income and employment, the relative share of SMEs to the total employment is higher, compared to their share of the total
income in the industry. Therefore, SMEs have greater potential of generating jobs in the agro-processing industry.